Gold Today – Gold closed in New York at $1,618.40 and in London’s early morning fell to $1,627.35. The Fixing in London today was set at $1,633.25 and in the euro at €1,305.451. Ahead of New York’s opening gold stood at $1,633.00 and in the euro, €1,307.03 while the euro was at €1: $1.2494. [To follow our weekly commentary, please subscribe to our newsletters at www.GoldForecaster.com and at www.SilverForecaster.com.].
Silver Today – Silver slipped slightly in New York to $28.56. This morning in Asia it had jumped to $29.01. Ahead of New York’s opening at $29.19.
Silver (very short-term)
Silver may well continue to show a positive bias, today in New York.
Price Drivers
Gold – Perhaps the most negative factor in the gold market is the weak Rupee, causing Indian investors to perceive that gold prices are at a high at over Rs.90,000 an ounce. This has increased re-cycling of gold and stunting imports of gold. It is only a matter of time before this changes and Indians realize they are being deceived by a weak Rupee. With Indian demand such a major driver of the gold price, it is remarkable that the gold price is rising today. Chinese and central bank demand are clearly sufficient to take the price higher. Traders are also accepting these higher prices having been short of gold for sometime now. Speculators are sitting with very low long positions still. This limits the downside for the gold price.
Spain, we are led to believe is on the brink of requesting a bailout, through one route or another. But, at last Eurozone leaders are formulating plans that will shift sovereign risk back to where it should be the shareholders and bond holders of the banks. We forecast that the only way this could work in the future is to force Pension and other Funds to buy bank bonds, through the system of prescribing percentages of what portion funds must buy in banks. Otherwise why buy bank bonds? Loans will, for sure become much more expensive. Is this a step away from the unholy alliance of governments and banks?
The euro recovered this morning to €1: $1.25. The Indian Rupee is slightly weaker at $1: Rs.55.5850 but is still likely to remain weak.
Silver – Silver is moving faster than gold and now catching it up.
Regards,
Julian D.W. Phillips for the Gold & Silver Forecasters
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